CPI Inflation

The monthly CPI indicator suggested that annual inflation was steady at 2.1% in October, which is the lowest level since July 2021. The headline rate of inflation is being held down below the mid-point of the RBA target range by the impact of household electricity bill relief measures that are being rolled out by Commonwealth and state governments.

The headline CPI (unadjusted) rose 0.2% in Q3 2024, taking the annual rate of inflation 1 percentage point lower to 2.8%. The annual rate of headline CPI inflation is back in the RBA target range of 2-3%, for the first time since 2021. However, trimmed mean inflation, which is the RBA’s favourite underlying price gauge, was 0.8% in the quarter and 3.5% through the year.

The monthly CPI indicator signalled a 0.8ppts fall in the annual rate of consumer price inflation to a three-year low of 2.7% in August. The decline was in line with expectations as government electricity rebates reduced the cost of power for households.

The monthly CPI indicator suggested that the annual rate of consumer price inflation declined 0.3ppts to a four-month low of 3.5% in July. The market participants expected a slightly larger decline, to 3.4%.

The headline CPI (unadjusted) rose 1.0% in Q2 2024, taking the annual rate of inflation 0.2ppts higher to 3.8%, in line with the market expectations. Trimmed mean inflation, the RBA’s favourite underlying price gauge, rose by 0.8% in the quarter, with the annual rate slowing 0.1ppts to an over two-year low of 3.9%, against the market expectations of no change at 4.0%.

The monthly CPI indicator suggested that consumer price inflation picked up 0.4ppts to 4.0% YoY in May 2024, which is somewhat more than the 3.8% increase pencilled in by the market consensus. This is the highest level of consumer price inflation implied from the monthly CPI indicator since November 2023. Annual trimmed mean inflation rose 0.3ppts to 4.4%, the highest level in six months.